What the Manchester United débâcle reveals about succession planning

I knew I would have to write this article; the only question was how soon.

In August last year I tweeted: “Pep Guardiola will be just fine; David Moyes will not.” I was responding to the appointment of Guardiola and Moyes as managers of two of the top teams in world football: Bayern Munich and Manchester United, respectively. After watching the new managers’ first few games in charge, I felt confident enough to make a prediction on Twitter.

Guardiola subsequently won Germany’s Bundesliga championship by a country mile; Moyes has just been sacked by Manchester United after a truly appalling ten months in office, leaving his team languishing in seventh place in the English Premier League.

I do not have any powers of prophecy, please note, and no streets need be washed for me. This was an educated guess, based on decades of watching organizations, their leaders and their successors. I don’t even make predictions, unless they’re no-brainers. And I was wrong as well as right: I didn’t expect the implosion to be this rapid.

The problem here was not the unfortunate Mr Moyes; it was the long, hugely successful reign of the man who preceded him, Sir Alex Ferguson. I chronicled Ferguson’s achievements on this page when he retired. Unfortunately, his leadership legacy does not now meet the final test: that of creating other leaders.

Here’s the thing: you never allow a leader, no matter how great or successful, to unilaterally choose his or her own successor. That privilege should never have been granted to Ferguson.

Why not? Leaders have a tricky ego problem when it comes to handing over: they don’t want anyone who will dismantle their legacy; and they don’t want anyone who will rise to even greater heights without using the foundation set by the great incumbent. This is a quiet, unspoken, unacknowledged psychological issue that bubbles under the surface of every succession situation.

So, if you allow the incumbent to choose the successor alone, he will invariably select someone who will play safe. The incumbent will almost never choose anyone who will do something fresh and different – even though, after years of doing something one way, a radical refresh is probably what is needed.

Ferguson, and the board of directors above him, failed miserably in this regard. He was apparently given carte blanche to choose his man, and he duly chose Moyes: a manager who had never won any major trophy in his career; who had only managed to keep his former club, Everton, hovering in upper-mid-table mediocrity; and who, most damningly, had a play-safe footballing philosophy that was the antithesis of Ferguson’s swashbuckling, go-for-it signature style. But Moyes adored Ferguson, and shares his Scottish roots. And so he became ‘The Chosen One.’

The rest you know. Moyes rapidly killed off United’s attack-minded ethos; baffled his own players; couldn’t handle the media glare at a huge club; and lost home and away to the team’s most detested rivals, as well as to his own former club. I repeat, though: it’s not his fault. He was the victim of the decisions of others, who plunged him into depths he had never before encountered.

Here’s what should have happened. United’s board should have appointed a top-notch succession committee, with real expertise in world football. That committee should have begun work years before the actual handover, and considered the world’s best targets. Ferguson should have had a big say in the decision, but not the only say. And he should have been required to develop and groom one or two insiders over time, to add internal candidates to the pot. Then, a real decision could have been made.

Instead, one man decided. The consequences may reverberate for some time, for the ship, when rocked so severely, takes time to right itself. Ferguson now teaches leadership at Harvard University. Hopefully, he’s not being asked to include succession planning in his teaching plan.

Sunny
Let’s also talk about the other big failures of both Ferguson and the board.

1. Ferguson: Great leaders are humble enough and great enough to nurture a deep bench of young leaders waiting on the wings to take over. They nurture them, give them the tools to be better than them. For Ferguson afraid his leadership legacy dies with his tenure. A great
Leader in my humble opinion is only recognized after his tenure. I encourage your readers to read about GE’s leadership program.

2. The Board. They bear the brunt of my dissapointment. They negated their fiduciary responsibility regarding the viability and continuity of the club Post-Ferguson. They allowed themselves to be bullied and smothered by the superstar status of Ferguson. We now see the results.

But there are key differences. Jobs did not handpick Cook; the work was done by the board. Jobs began grooming his successor and choosing from amongst his lieutenants some time before the actual succession; Apple decided the succession needed to be internal, to protect the strong ethos and culture of the organization; and Apple has not imploded, merely lost market share, which is a natural consequence of its premium-positioning strategy (it would have happened under Jobs, too.)

Sure, Apple is not the same with Jobs gone, and its appetitive for blow-your-socks-off innovation is certainly in question. But you can’t argue Cook has ruined the company in his first year. If Moyes had been allowed to continue, doom was assured.

A couple of things we can learn:
Everton are profitable. ManU are not if you consider the profit/loss before tax. ManU got a tax credit so they reported a profit after tax.
Moyes was probably a great leader who needed time to work his way. But the Glazers have heaped a lot of debt on ManU (see the graphs by Swiss Ramble) that they MUST keep the short term performances going – winning the EPL and getting into the Champions League. And so to quote Warren Buffett “Time is the friend of the good business”. ManU is in dire straits as a business. The Glazers do not have time since they are sitting on a ticking debt bomb.
They need to win, win and win so more trophies in the short term (which translates to more revenues) at the expense of ManU’s long term stability.
SAF picked someone, rightly so, whom he thought would be a good long term fix for the club, especially off the pitch. The Glazers, however, don’t want the music to stop.
Look at how financially stable, and in good shape, Moyes left Everton. In fact Martinez, who took over from Moyes, has made a few changes and the ship is sailing on smoothly. Martinez will succeed because of the 11 years of strategic and focused work by Moyes.
As you quote Moyes “a manager who had never won any major trophy in his career”.
Arsene Wenger said there is more to football than winning trophies.
Please take time and read this link: http://www.ft.com/intl/cms/s/2/2fa7ef1e-b2c0-11e2-8540-00144feabdc0.html#slide0
You will understand what Moyes really built at Everton.

Going further, Arsene Wenger has made Arsenal a very profitable club, sitting on a lot of cash on the balance sheet. He will make it to the Champions League again for the next season. The day Wenger leaves Arsenal, the club will not skip a heart beat.

There are limits to the extent to which I am ready to accept financial explanations of football-club situations. You can pour all the cold water you like, but a football club does not exist just to reward its owners and shareholders. I’m all for financial sustainability, but a club exists primarily for its fans, and that is the long-forgotten constituency having every drop squeezed out of it in rising ticket prices, and suffering because clubs are run mainly as businesses, which means: heap on the debt; finish 4th or 6th every year to get Euro money; buy young, untested players as a crap-shoot, hoping one pays off big every so often.

That’s not the type of club I’m interested in, and nor are most lovers of the game.

Again: I’m all for clubs making money and keeping themselves healthy. But if that means regarding Moyes (or Wenger v2) as a model manager, I’m not in. Ask most Everton or Arsenal fans what they think.

Hi Sunny,
Thanks for your reply.
So what becomes of sport? Who will invest in sports if it does not reward the owners? Why did John Henry buy into Liverpool?
Clubs don’t have to heap on debt or buy young untested players (Flamini at Arsenal was an old player, who came free). Clubs also do not have to be run like businesses. The common thread in sports or business is using very little resources to overachieve. Fans love that story. In fact most fans will support the underdog who runs on very little resources but overachieves.
I’m sure you have read the book titled “MoneyBall by Michael Lewis” or watched the movie.
Sport is becoming a celebration of the underdog using very limited resources to overachieve. It has a fairy tale story to it as well, which attracts many more fans. The same for businesses (Think of how Paul Kinuthia of Nice and Lovely took on the global giants until L’Oreal bought him out).
Look at Atletico Madrid and their revolution under Simeone. They are overachieving against the likes of Real Madrid in Spain. How many neutrals are supporting Atletico now that they have a chance of winning La Liga? When Atletico knocked out Barca in the Champions League quarters, many Barca supports applauded Atletico after the game. But at the end of the season Atletico will sell its best players – definitely Diego Costa – extracting the highest dollar value for them.
Deep deep down I think most Arsenal fans are very happy with Wenger.
Everton fans regard Moyes as a legend. Did you see the reception he got during his last game before he moved to ManU?
Thank you

We may be talking at cross-purposes. I have no problem with most of the teams you mention, and love to see a surprise success. My point is only that football clubs are very distinctive businesses, and have huge swathes of emotion swirling around them. Dispassionate financial thinking is not the only way to consider this.

I do disagree on your final paragraph: most Arsenal fans I have asked are NOT happy with Wenger v2. How can they be, with zero trophies in 8 years? And the proof of the pudding is in asking them. I do, and my informal surveys suggest most fans would want a change this summer, to the manager AND the business model.

As for Moyes at Everton…again, ask their fans if they’d have him back instead of their new manager, Roberto Martinez. Spinning your wheels in the same place year after year may be fine in terms of business stability, but it hardly befits a football club with a proud tradition, and that once used to win the league.

Wanjala Were Reply:April 28th, 2014 at 11:22 pm

Sunny,
Ok. I think we can agree to look at football as a very distinctive business.
However, I would like to put my money where my analysis is.
Many supporters have their opinions but not many of them are willing to put money where their opinions are.
If Arsene Wenger does not win a trophy this year and a double next year (any of the following two – EPL, Champions League or FA Cup – next year (meaning he is going nowhere), I will buy you lunch at a place of your choice. If he does win a trophy this year and the double next year? Thank you.

Wenger to win a double next year? Rather than take your money off you for lunch, I’d be happy if you make the donation of your choice to the person/charity of your choice when that double doesn’t happen…please come on here in May 2015 to confirm!

I admire your conviction, though…

Wanjala Were Reply:May 2nd, 2014 at 4:19 pm

Sunny:

Thanks. I knew nothing about Arsenal and that is why am sure. “You are only sure when you know nothing”. In that case, I will put the money in a fund, preferably with a fund manager, who can invest on behalf of the charity.
In other news, I read a story that Gor Mahia are in financial problems. They cannot pay salaries. How is our local soccer scene? It will be good to look at how our local clubs are fairing.
Thank you.

This is a great point you make that’s particularly relevant in today’s Kenya. What makes it especially so is the timing – Kenya has many established and up-and-coming entrepreneurial firms, some exceedingly successful and many family-owned with an ageing founder-manager fast approaching retirement.

In my observations, few of these entrepreneurial companies consciously establish succession plans. Many pointedly groom family members to take over from the founder – succession solved!

One admirable example is a fast rising local bank where a professional was sought to take over as CEO when the founder retired, and where the Board has since appointed an independent Chair (the family remains the largest shareholder). This example is notable in that it’s the exception; sadly, as is the case with Man United, the majority of entrepreneurial corporate Kenya remains dazzled by the choices that their founders make – let’s hope with very different consequences (go Arsenal!).

I think Wanjala Were is an analyst but not a passionate fan .Before the Glazer family came to ManUtd,they were doing just fine both on and off the field.And the reason they came to ManUtd was because they were doing fine.As for financial the standing of a club my logical wild guess is that 70-80% of the fans don’t know and care less about it as long as the trophy cabinet keeps on bulging.It’s the 20-30%(you and me) that grapple with the finer details off the pitch.

Lovely article though I slightly disagree with you. Firstly, Sir Alex Ferguson made ‘one mistake’ does that mean he should be judged solely by it? Let us look at a list of other leaders Sir Alex has also produced: Roy Keane(Assistant Coach Ireland) Steve Bruce(Hull FC Coach) Mark Hughes (Stoke FC Coach) Solksjaer (Cardiff City Coach) Laurent Blanc (PSG Coach) Garry Neville (England Coaching Setup) Ryan Giggs,Paul Scholes,Nick Butt and Phil Neville(Man Utd Coaches)…and that is just from the top of my head Sir. Sir Alex Ferguson creates leaders.

As for his ‘bad choice’ was it a bad one really? Sir Alex Ferguson knew that what Manchester United really needed was someone to uphold its structures and motivate its players. It’s players needed no education on football because if a player gets to Man United,they are already a top player. David Moyes did both at Everton,exceptionally so. His players believed in him and even gave him a standing ovation on his departure. He had won the hearts of the club,its fans and its players. These were the ideals Sir Alex Ferguson knew MUFC needed…we still do.

Moyes on the other hand made a fatal flaw. He tried to change too many things at the same time. While every manager wants to feel like they are in authority,when you go to a nee organization it would be better to immerse yourself into the company traditions, find out what they do and slowly and steadily start leaving your mark. Sir Alex advised Moyes to keep the former coaching staff to help him with the transition. D. Moyes thought he would not be his own man,so he fired them. Think of the new manager of a company firing their entire management team on his first day of work. Unthinkable, moreso in an established organization

D.Moyes,i believe, tried too hard to distance himself from Sir Alex, he ended up isolating MUFC staff and players. Even the great Jose Mourinhio had to bear Juan Mata for half a season before selling him (gradual change). If his first act as Cfc manager was to sell Mata he would have isolated his fans and players. He kept him on the bench and released him in January saying he wanted Mata to play in the World Cup. He got more fans than foes as a result. TIMING!!!

I believe the real lesson from the D.Moyes situation to any manager of a new organization is, learn everything about the organization, find out what is good and what is not. Then find a way of winning your employers and/or employees over. Then slowly but surely make your changes.

I’ve never doubted Sir Alex’s achievements, and wrote about them when he retired. But you won’t convince me on this one. Moyes made no sense as a successor. I’d have been delighted to see Ferguson groom all the people you mentioned for Man Utd – but he did not. Succeeding elsewhere is not the same as being groomed in the great man’s shadow. And your list does not yet contain a true winner in management terms.

As for Moyes, he did all the things you list BECAUSE he was the wrong man. He did not become the wrong man because he did them. He was way out of his depth, has never had experiences approaching the intensity of leading Man Utd. He was never going to hack it. Like I wrote, I had this column ready from January 2014…

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